2017 Russia RepTrak® 6th OF JULY, 2017
1 Table of Contents
• Introduc on • What is reputa on? • The RepTrak study® results among 30 largest and well-known Russian companies • The RepTrak® results among 109 largest and well-known interna onal firms opera ng in Russia • Comparing Russian companies with interna onal firms in Russia • Wrap-up
2 Introduc on
3 Welcome to the Russia RepTrak®
• Reputa on Ins tute conducted a reputa on study among the 30 largest Russian companies in 2017. Data were gathered in 2Q2017 among 1 584 respondents in Russia. • In addi on Reputa on Ins tute conducted a reputa on study among the 109 largest interna onal companies opera ng in Russia. Data were gathered in 1Q2017 among 11 867 respondents in Russia. • We have used the RepTrak® methodology. • Respondents are qualified at 2 ers: – Familiarity: Respondent must be “somewhat” or “very” familiar – RepTrak® Pulse: 75% comple on of RepTrak® pulse ra ng to be included 4 What is reputa on? Why does it ma er and how can you measure it?
5 What is Reputa on?
What is reputa on? Implica ons
• Percep on is the basis for reputa on forma on • Percep ons across stakeholders are aggregated into one reputa on Reputa on is a percep on among all • Reputa ons are rela ve and only have meaning stakeholders about the degree in in the context of a comparison with direct which the organiza on is seen as compe tors and/or previous years reliable in delivering upon the • A reputa on is never forever: new social promises it makes and ac ng in line expecta ons will impact stakeholder demands with social expecta ons and as a consequence the nature of reputa on management a firm has to apply has to change accordingly
6 Why Measure Reputa on?
• The success of your company depends on ge ng people to support you. Reputa on is an …that ensures emo onal bond… • Customers buy your products… • The general public recommend your company… • Policy makers and regulators give you a license to operate… • The financial community invests in you… • The media reports favorably on your point of view… • Employees deliver on your strategy… RepTrak® is a registered trademark of Reputa on Ins tute. Copyright © 2017 Reputa on Ins tute. All rights reserved. 7 The RepTrak® Model
8 Reputa on Drives Support
Reputa on Score 0-39 40-59 60-69 70-79 80+
Would buy the products 9% 16% 35% 60% 85%
Would recommend the products 8% 12% 27% 53% 83%
Would trust to do the right thing 8% 12% 27% 50% 79%
Would say something posi ve 8% 12% 29% 54% 83%
Would work for 11% 16% 29% 49% 70%
Would invest in 8% 10% 21% 40% 64%
9 Products/Services, Governance and Innova on are the Key Drivers of Reputa on with the General Public in Russia for Russian Companies 2017 Russian RepTrak® Drivers
• Product/Services: Offers high quality products and services – it offers excellent products and reliable services 12,6% 19,3% • Innova on: Is an innova ve company – it makes or sells innova ve products or innovates in the way it does business • Workplace: Is an appealing place to work – it treats its 11,6% 14,2% employees well • Governance: Is a responsibly-run company – it behaves ethically and is open & transparent in its business dealings 13,9% 12,3% • Ci zenship: Is a good corporate ci zen – it supports good causes 16,2% & protects the environment • Leadership: Is a company with strong leadership – it has visible leaders & is managed effec vely • Performance: Is a high-performance company – it delivers good
financial results 10 Reputa on has a Significant Added Effect on Market Value!
Source: Reputa on & Financial Performance by Dr. Charles J. Fombrun, October 2016. See website Reputa on Ins tute. 11 Reputa on study among the 30 largest and well-known Russian companies
12 2017 Russia RepTrak® Study: Who did we Ask Ques ons? Number of respondents: 1 584 100.0% GENDER • Male = 48% 90.0% • Female = 52% AGE 80.0% • 18-24 years = 16% • 25-34 years= 23% 70.0% • 35-44 years = 20% • 45-64 years = 42% 60.0% INCOME 50.0% • Low Income = 2% • Middle Income = 51% 40.0% • High Income = 40% • N/A = 8 30.0% REGIONS Familiarity • Central = 30% 20.0% •South = 10% •North West = 11% 10.0% •Far East = 2% •Siberian = 15% 0.0% •Ural = 9% 40.00 45.00 50.00 55.00 60.00 65.00 70.00 75.00 80.00 85.00 90.00 •Volga Region = 21% RepTrak® Pulse •North Caucuses = 3% RepTrak® is a registered trademark of Reputa on Ins tute. Copyright © 2017 Reputa on Ins tute. All rights reserved. 13 Russia RepTrak® - Russian Companies - Demographic Overview
Overall
69,5 Overall General Popula on Male Female
67,3 71,5
Gender 18-24 25-34 45-64 35-44
69,0 69,3 69,3 70,8 Age Middle High Low
69,4 69,7 73,0
North North Income Far East Ural Central West Siberian Volga Region South Caucuses
66,0 68,0 68,2 68,5 69,1 70,4 70,8 73,6 Region 14 2017 Russia Industry Ranking
RepTrak® Rank Company Pulse Score 1 Metals & Mining 69,8 2 Oli & Gas 69,4 3 Retail 68,6 Telecommunica on 4 67,9 s 5 Financial 66,6
Norma ve Scale Excellent/ Top Tier 80+ Strong/ Robust 70-79 Avg./ Moderate 60-69 Weak/ Vulnerable 40-59 Poor/ Lowest Tier <40
RepTrak® Pulse scores are based on ques ons measuring Trust, Admira on & Respect, Good Feeling, and Overall Esteem (captured in the RepTrak® Pulse score on a 0-100 scale). 15 WINNER Russian Most Reputable Company 2017
16 The 10 Russian Companies with the Best Reputa ons in Russia RepTrak® Rank Company Pulse Score 1 84,8
THE STRENGTH OF THE EMOTIONAL BOND 2 77,7 BETWEEN THE COMPANY AND GENERAL PUBLIC BASED ON: 3 74,6 - TRUST - GOOD FEELING 4 74,2 - ADMIRATION - ESTEEM 5 73,8 6 73,7
7 72,6 Norma ve Scale 8 72,6 Excellent/ Top Tier 80+ Strong/ Robust 70-79 Avg./ Moderate 60-69 RepTrak® Pulse scores are based on ques ons measuring 9 72,3 Weak/ Vulnerable 40-59 Trust, Admira on & Respect, Good Feeling and Overall Poor/ Lowest Tier <40 Esteem (captured in the Pulse score on a 0-100 scale). All RepTrak® Pulse scores that differ by more than +/- 1,0 10 72,0 are significantly different at the 95% confidence level 17 Norma ve Scale Excellent/ Top Tier 80+ Strong/ Robust 70-79 2017 Russia RepTrak®: Russian Most Reputable Companies Avg./ Moderate 60-69 Weak/ Vulnerable 40-59 Poor/ Lowest Tier <40 RepTrak® RepTrak® Rank Company Industry Pulse Score Rank Company Industry Pulse Score 1 Yandex Technology 84,8 16 Evraz Group S.A M&M 68,5 2 Aeroflot Airlines 77,7 17 RUSAL M&M 67,5 3 Sberbank Financial 74,6 18 ALROSA M&M 66,9 4 M.video Retail 74,2 19 NOVATEK Oil&Gas 66,9 5 S7 Airlines Airlines 73,8 20 RZD Transport 66,7 6 NLMK M&M 73,7 21 MTS Telecomm 66,7 7 Gazprom Oil&Gas 72,6 22 Rosne Oil&Gas 66,1 8 Mail.ru Technology 72,6 23 VimpelCom Telecomm 65,7 9 Lenta Retail 72,3 24 Magnit Retail 65,0 10 LUKOIL Oil&Gas 72,0 25 Otkri e Bank Financial 64,9 11 Norilsk Nickel M&M 71,7 26 Sovcombank Financial 64,6 12 Tele2 Telecomm 71,5 27 Rostelecom Telecomm 64,4 13 MegaFon Telecomm 71,2 28 DIXY Retail 63,1 14 Severstal M&M 70,1 29 Alfa Bank Financial 63,0 15 VTB Financial 70,0 30 Sistema JSFC Financial 62,5
All RepTrak® Pulse scores that differ by more than +/- 1,0 are significantly different at the 95% confidence level 18 Norma ve Scale Excellent/ Top Tier 80+ Strong/ Robust 70-79 Evolu on of the Top 10 – 2012 vs 2017 Avg./ Moderate 60-69 2012 RepTrak® 2017 RepTrak® Weak/ Vulnerable 40-59 Rank Company Rank Company Poor/ Lowest Tier <40 Pulse Score Pulse Score 1 81,2 1 84,8 2 73,8 2 77,7 3 73,7 3 74,6 4 71,5 4 74,2 5 69,5 5 73,8 6 69,1 6 73,7
7 68,9 7 72,6
8 68,8 8 72,6
9 68,5 9 72,3 10 10 72,0 68,1 19 Evolu on of RepTrak Pulse of Russian Companies – 2012 vs 2017 2012 2017
62,6 + 6,9 69,5
Norma ve Scale Excellent/ Top Tier 80+ Strong/ Robust 70-79 Avg./ Moderate 60-69 Weak/ Vulnerable 40-59 Poor/ Lowest Tier <40
20 Pulse, Dimensions & Suppor ve Behavior of the Top 5
#1 #1 #2 #2 #4 #3
#3 #6 #9
#4 #18 #18
#5 #13 #8
Note: A color indicates that a rank deviates at least 5 places from the #2 #1 Pulse rank #7 21 Pulse, Dimensions & Suppor ve Behavior of the Top 5
#1 #1 #2 #2 #4 #3
#3 #6 #9
#4 #18 #18
#5 #13 #8
Note: A color indicates that a rank deviates at least 5 places from the #2 #1 Pulse rank #7 22 Pulse, Dimensions & Suppor ve Behavior of the Top 5
#1 #1 #2 #2 #4 #3
#3 #6 #9
#4 #18 #18
#5 #13 #8
Note: A color indicates that a rank deviates at least 5 places from the #2 #1 Pulse rank #7 23 Strong Reputa on Pla orms: Top 5 in Reputa on Drivers Products and Services Innovation Workplace • Yandex dominates the Top 5 1 Yandex 82,5 1 Yandex 82,1 1 Yandex 72,4 rankings. Not only a presence in 2 NLMK 78,0 2 Gazprom 78,4 2 Gazprom 72,1 3 Norilsk Nickel 77,4 3 LUKOIL 75,4 3 Aeroflot 71,6 all seven drivers, but five mes 4 Severstal 77,0 4 Norilsk Nickel 74,6 4 S7 Airlines 71,2 the number 1. 5 Aeroflot 76,5 5 NLMK 73,9 5 NLMK 71,1 • Being the largest natural gas Governance Citizenship Leadership company in the world pays of 1 Yandex 78,4 1 Yandex 77,4 1 Gazprom 79,8 Gazprom number 1 posi on on 2 Tele2 Russia 75,5 2 Gazprom 74,4 2 Yandex 79,3 3 Sberbank 74,8 3 Sberbank 71,9 3 Norilsk Nickel 78,2 both Leadership and 4 Mail.ru 74,4 4 Lenta 71,4 3 NLMK 76,5 Performance. 5 Aeroflot 74,1 5 Mail.ru 71,3 5 LUKOIL 76,3 • Please note the lower scores for Performance the so drivers of reputa on: 1 Gazprom 84,9 2 Norilsk Nickel 81,2 7x Yandex Companies with a Workplace, Governance and 3 Yandex 81,1 strong reputa on Ci zenship compared with P&S, 4 LUKOIL 78,7 5x Gazprom pla orm Innova on and Performance. 5 Sberbank 77,9
24 Key Drivers of Reputa on for Russian Companies Weight on Reputa on Offers products and services that are a good value for the money 5,7% Offers high quality products and services 5,6% Has a positive influence on society 5,4% Meets customer needs 5,3% Is generally the first company to go to market 5,2% Is open and transparent 5,2% Is fair in the way it does business 4,9% Stands behind its products and services 4,8% Is an innovative company 4,6% Shows strong prospects for future growth 4,5%
25 Who’s the Leader on the 23 A ributes?
Products & Services High quality products Yandex Good value for money Yandex Stands behind its products Yandex Meets customer needs Yandex Innovation • Not surprisingly Yandex is Is an innovative company Yandex Is generally first to market Yandex evaluated highest on most Adapts quickly to change Yandex Workplace of the reputa on Offers equal opportunities Yandex Rewards employees fairly Gazprom a ributes, followed by Concerned with employees Gazprom Gove r na nc e Gazprom. Fair in the way it does business Yandex Behaves ethically Yandex Open and transparent Yandex Citizenship • The only excep on is Environmentally responsible Yandex Positive influence on society Yandex Norilsk Nickel, that is 11th Supports good causes
Highest-rated companies Gazprom Leadership in the reputa on ranking, Well-organized company Gazprom Strong and appealing leader Norilsk Nickel but is seen as number 1 on Excellent managers Yandex Clear vision for its future Gazprom “has a strong and Performance Is a profitable company Gazprom appealing leader”. Strong prospects for growth Gazprom Performs better than expected Gazprom 26 The Need for all Russian Companies to Communicate More Effec vely is Clear The % refers to how many people strongly agree that Russian companies.. Meets the needs of its customers 54 %
Delivers a consistent experience 53 %
Stands out from the crowd 51 %
Delivers on its promise 47 %
Provides sufficient informa on about its ac vi es 45 %
Appears genuine about what it says and what it stands for 40 %
Communicates o en 40 %
Welcomes open discussion with outside audiences about its ac vi es 34 %
0 10 20 30 40 50 60 27 Russian Companies are at Risk – Need to Tell their Story
• 43%-60% of consumers are UNCERTAIN about what the companies are doing FENCE SITTERS = % of public who is neutral or ‘not sure’ across the 7 dimensions about the company’s performance on that dimension 60% PRODUCTS & SERVICES 6% 38% 55% 5%
INNOVATION 6% 46% 34% 13% 47%
WORKPLACE 5% 44% 30% 20% 50%
GOVERNANCE 7% 42% 33% 18% 51%
CITIZENSHIP 6% 37% 34% 23% 57%
LEADERSHIP 5% 43% 29% 23% 52%
3% 54% 29% 14% PERFORMANCE 43% DISAGREE STRONGLY AGREE NEUTRAL NOT SURE 28 Communica on Expressiveness • Yandex is seen as most expressive – leading on 5 out of 6 communica on elements. • However, Gazprom is the absolute winner when it comes to dis nc ve Number 1 communica on, with a score of almost 90. This may be the result of sponsoring the Champions League. Visible
Visible Dis nc ve Top 3 in Consistent Responsive Distinctive Communica on Expressiveness: Transparent Yandex Gazprom Sincere Aeroflot
Responsive Sincere Consistent Statements: Visible: Communicates often Distinctive: Stands out from the crowd Consistent: Delivers a consistent experience Transparent: Provides sufficient information about its activities Sincere: Appears genuine about what it says and what it stands for Transparent Responsive: Welcomes open discussion with outside audiences about its activities 29 CSR assessment of companies in Russia
30 CSR Importance for Russian Companies 2017
12,6% 19,3%
11,6% 14,2%
13,9% 12,3%
16,2%
CSR Index 42,4%
31 Top 3 Drivers of CSR for Russian Companies – Best in Class vs Worst in
Class Posi ve Influence on Society
Top 3 7% 26% 62% 5%
Bo om 3 10% 45% 33% 11%
Open and Transparent Top 3 5% 25% 54% 16%
Bo om 3 8% 41% 30% 21%
Is fair in the way it does business
Top 3 6% 27% 57% 10%
Bo om 3 12% 38% 31% 20%
DISAGREE NEUTRAL STRONGLY AGREE NOT SURE 32 Reputa on study among the 109 largest and well-known interna onal companies in Russia
33 WINNER Russian Most Reputable International Company 2017
34 The 10 Interna onal Companies with the Best Reputa ons in Russia RepTrak® Rank Company Pulse Score 1 87,6 THE STRENGTH OF THE EMOTIONAL BOND 2 87,3 BETWEEN THE COMPANY AND GENERAL PUBLIC BASED ON: 3 86,7 - TRUST - GOOD FEELING 4 86,4 - ADMIRATION - ESTEEM 5 85,8 6 85,4
7 84,7 Norma ve Scale 8 84,7 Excellent/ Top Tier 80+ Strong/ Robust 70-79 Avg./ Moderate 60-69 RepTrak® Pulse scores are based on ques ons measuring 9 84,6 Weak/ Vulnerable 40-59 Trust, Admira on & Respect, Good Feeling and Overall Poor/ Lowest Tier <40 Esteem (captured in the Pulse score on a 0-100 scale). All RepTrak® Pulse scores that differ by more than +/- 1,0 10 84,5 are significantly different at the 95% confidence level 35 Norma ve Scale Excellent/ Top Tier 80+ Strong/ Robust 70-79 2017 Russia RepTrak®: Interna onal Most Reputable Avg./ Moderate 60-69 Weak/ Vulnerable 40-59 Companies Poor/ Lowest Tier <40 RepTrak® RepTrak® Rank Company Industry Pulse Score Rank Company Industry Pulse Score 1 Volkswagen Automo ve 87,6 16 Nokia Technology 83,5 2 Rolex Consumer 87,3 17 Visa Financial 83,4 3 Canon Consumer 86,7 18 Google Technology 83,3 4 Robert Bosch Consumer 86,4 19 Michelin Automo ve 83,1 5 Microso Technology 85,8 20 IBM Technology 82,8 6 Rolls-Royce Aerospace Industrial 85,4 21 Hugo Boss Retail 82,8 7 BMW Group Automo ve 84,7 22 Marrio Interna onal Hospitality 82,8 8 Adidas Consumer 84,7 23 Honda Motor Automo ve 82,7 9 Nike, Inc. Consumer 84,6 24 The Walt Disney Company Informa on 82,7 10 Toyota Automo ve 84,5 25 Levi Strauss & Co. Consumer 82,2 11 Samsung Electronics Technology 84,3 26 Daimler Automo ve 82,0 12 LEGO Group Consumer 84,1 27 Bridgestone Automo ve 82,0 13 Sony Consumer 83,9 28 LG Corpora on Consumer 82,0 14 Swatch Group Consumer 83,9 29 Mastercard Financial 81,8 15 Intel Technology 83,6 30 Deutsche Lu hansa Airlines 81,7
All RepTrak® Pulse scores that differ by more than +/- 1,0 are significantly different at the 95% confidence level 36 Pulse, Dimensions & Suppor ve Behavior of the Top 5
#1 #2 #3 #2 #6 #2 #3 #22 #6 #4 #9 #8 #5 #1 #5 Note: A color indicates that a rank deviates at least 5 places from the Pulse rank. 37 Strong Reputa on Pla orms: Top 5 in Reputa on Drivers Products and Services Innovation Workplace • Volkswagen, BMW Group, 1 BMW Group 86,5 1 Microsoft 85,1 1 Microsoft 85,5 Google and Microso dominate 2 Volkswagen 86,4 2 Apple 85,1 2 BMW Group 82,0 the top 5 in the dimensions 3 Canon 86,2 3 Google 84,9 3 Volkswagen 80,5 4 LEGO Group 86,0 4 Intel 83,6 4 The Walt Disney Company 80,4 rankings. 5 Robert Bosch 85,5 5 BMW Group 83,2 5 LEGO Group 79,9 • Microso not only is 5 mes in Governance Citizenship Leadership the ranking, but for 4 mes 1 Volkswagen 81,9 1 Volkswagen 81,1 1 Microsoft 84,9 number one. 2 Microsoft 80,6 2 Google 79,6 2 Volkswagen 83,7 • Please note the lower scores for 3 Rolex 79,6 3 Robert Bosch 78,9 3 Samsung Electronics 83,0 4 Google 79,2 4 Toyota 78,9 4 Google 83,0 the so drivers of reputa on: 5 Adidas 79,2 5 IKEA Group 78,7 5 BMW Group 82,8 Governance and Ci zenship Performance compared with P&S, Innova on 1 Microsoft 86,8 and Performance. 2 Volkswagen 86,4 6x Volkswagen Companies with a 3 Google 86,2 5x BMW Group, Google, Microsoft strong reputation 4 BMW Group 86,1 platform 5 Apple 84,8
38 Comparing Russian companies with interna onal firms in Russia
39 2017 Russia RepTrak®: Top 10 Russian Companies vs Top 10 Interna onal Companies RepTrak® RepTrak® Rank Company Pulse Score Rank Company Pulse Score 1 84,8 1 87,6 2 77,7 2 87,3 3 74,6 3 86,7 4 74,2 4 86,4 5 73,8 5 85,8 6 73,7 6 85,4
7 72,6 7 84,7
8 72,6 8 84,7
9 72,3 9 84,6
10 72,0 10 84,5 40 Comparison between Russian Companies and Interna onal Companies: Average Score Drivers
Russian Companies 2017 Interna onal Companies Russian RepTrak® 2017 Russian RepTrak®
74,9 72,4 78,2 79,4
72,2 69,1 76,2 74,8 69,5 Δ 8,7 78,2 66,8 66,1 72,8 71,1 68,5 74,0
RepTrak® Dimension Statements: Product/Services: 'Company' offers high quality products and services -- it offers excellent products and reliable services Innovation: 'Company' is an innovative company -- it makes or sells innovative products or innovates in the way it does business Workplace: 'Company' is an appealing place to work -- it treats its employees well Governance: 'Company' is a responsibly-run company -- it behaves ethically and is open & transparent in its business dealings Citizenship: 'Company' is a good corporate citizen -- it supports good causes & protects the environment Leadership: 'Company' is a company with strong leadership -- it has visible leaders & is managed effectively Performance: 'Company' is a high-performance company -- it delivers good financial results 41 Comparison between Russian Companies and Interna onal Companies: Impact Scores
2017 Russian Companies 2017 Interna onal RepTrak® Drivers Companies RepTrak® Drivers
12,6% 19,3% 13,0% 23,9%
11,6% 14,2% 12,1% 13,1%
13,9% 12,3% 13,8% 10,6% 16,2% 13,5%
42 CSR Spotlight – the Top Performers in Russia
Top CSR Performer Russian Top CSR Performer
Companies Interna onal Companies 43 Wrap-up
44 Wrap-up • Yandex has the best reputa on among the 30 largest Russian companies. • The gap between the top of the Russian reputa on ranking and the bo om is 22 points which is a standard pa ern we see all over the world. However, it also implies that some companies in Russia should improve their reputa on management in order to maintain ther license-to- operate. • The 30 largest interna onal companies are awarded by the Russian public with extreme high apprecia on numbers: all 30 are rated above 80!! This is unique in the world. • The number one posi on of Volkswagen with a stellar score of 87,6 is quite a contrast with the low degree of apprecia on for this firm in the
Western world due to dieselgate. 45 Get Your Company’s Data Ask us to be among the first to know your company's 2017 score and ranking. See how likely your stakeholders are to buy from you, work with you, and invest in your company. Understand how you can improve your scores and grow your stakeholder support. Please contact: EmCo Pavel Kim, partner [email protected] +7 495 645 9348 46